AUSTRALIA's more than 5000 dairy farmers will now have more sway with processors under the dairy industry Mandatory Code of Conduct.
Agriculture Minister Bridget McKenzie said the code - which takes effect from January 1 - will deliver transparency and certainty for the industry and more support for dairy farmers.
"New Year's Day marks the beginning of a new era of empowerment for Australian dairy farmers with a Code designed by farmers for farmers, coming into place," Ms McKenzie said.
"Under the code farmers will never again be held to ransom by processors, if a dairy farmer has held up their end of the bargain then the processor has to uphold theirs.
Under the code farmers will never again be held to ransom by processors, if a dairy farmer has held up their end of the bargain then the processor has to uphold theirs.
"The code bans retrospective step downs (drops in the minimum price after milk delivery) and tightly defines circumstances under which a prospective step down may occur.
"This includes giving the dairy farmer the right to freely terminate the contract within 21 days in the rare instance of a prospective step down notification."
Ms McKenzie said the code also provides increased powers for the Australian Competition and Consumer Commission with the introduction of civil penalties and a new dispute resolution process.
However, she said more pressure also needed to be applied to the supermarkets.
"Good returns and good retail prices for milk will encourage investment but, to see this, we need the retail price of private label milk to be lifted," Ms McKenzie said.
"Supermarkets are telling us that we are going to have to pay more for fruit, vegetables and meat as the drought drives prices up. They need to do the same for dairy.
"Our goal is to ensure safe, nutritious Australian dairy products are produced over this new decade and for generations to come. The public has a role to play in that by buying branded milk over home-brand and I look forward to purchase power making a difference."
The mandatory Dairy Code of Conduct was a key recommendation from the 2018 ACCC Dairy Inquiry which found contracting and industry practices were weighted heavily in favour of processors.
The story Powerful new dairy code comes into force from January 1 first appeared on Queensland Country Life.